Flip This House #3

Parents Social Lounge Parent Cafe
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<p>Back by popular demand :) </p>

<p>I have started the search for my Flip House #18, but College Confidential Flip House #3. Although, I don't really like the term 'Flip' so we're going to call it a Property Renovation!</p>

<p>I think the hunt for the project is one of the most interesting parts. So, we'll follow along on this hunt in one of the next posts. </p>

<p>I took a family vacation after finally completing the Pacific Beach remodel project and the North Park Spanish Bungalow. I told my lead carpenter and the crew that I would be back in July and start looking for a new project. I told them it would probably be August before we started back to work. My lead carpenter took off for Mexico to visit his Mom and work on a little project and he was not planning to return until August.</p>

<p>But No.... three days into my vacation my listing agent who has worked with me for over 5 years started sending frantic texts to my husband's phone (I did not take my phone because we were way out of the country). She represented a single Mom with two young kids that was buying a house. They went into contract on a townhouse in the La Jolla/Gilman Dr/UCSD area (for those that know San Diego). The house was in 'original' condition and needed a lot of work. The woman was panicking because she needed to gut it out, get new kitchen, baths, flooring, etc BEFORE school starts. And... she wasn't going to close escrow until July 15.</p>

<p>My agent wanted to know if I would be willing to do the remodel for her, similar to the Pacific Beach remodel. But, this remodel is going to be very very different because the woman plans to stay in the house a long time, it is not going up for sale. And she has a very tight budget so we need to be creative. </p>

<p>So, I had to meet with her at the townhouse (still in escrow) the day after I got back and then I panicked because my lead carpenter is down in Mexico somewhere. I had to track him down and beg him to come back by next Monday July 21. I could not take the job without knowing that he would be on the team. I am not going with Team B ever again :) </p>

<p>I think this remodel will be interesting to a lot of you because it's a nice little 3bd/2ba townhome 1500sf with HOA challenges (looking over your shoulder) and it needs to be done on a tight budget. Our goal is to be completed within 5 weeks. There are not any of the horrible distressed condition issues like my normal projects, just a house stuck in the 1970s that needs to be complete updated.</p>

<p>Budget = $43,000 and we are going to try to beat that budget
Project Management Fee is extra, I'm charging a flat fee and I wouldn't back down on the flat fee</p>

<p>I'm going to try to put some before pictures on Flickr and hopefully I won't lock it down by accident this time :) </p>

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<p>I have created a Flickr group called CC Remodel Project. It is supposed to be public for everyone to view. It has the before photos of the townhouse remodel project</p>

<p><a href=“Flickr: The CC Remodel Project Pool”>https://www.■■■■■■■■■■/groups/2641709@N25/&lt;/a&gt;&lt;/p&gt;

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<p>Now, back to the flipping hunt. I started my hunt on Monday July 7th.</p>

<p>House #1 - I called a prior Seller that had a large house that I had tried to buy during the last round. He was selling for $525k and my offer was $475k. He took the property off the market and was going to renovate and sell himself. I called him up to see how it was going because I saw that the property never came back on the market. He liked the house so much that he is going to move into it. He’s still not done with the renovation after 6 full months.</p>

<p>House #2 - I went to inspect a house in La Mesa in poor condition at the base of Mt Helix. Street is OK, not the best. This house just had a drastic price reduction so I thought maybe I could negotiate. Unfortunately, all the other investors saw it too and they had four offers. I was the only one making an offer through the Listing Agent, so she worked hard to try to help me. Unfortunately another investor was offering $20k more than my max offer, so I withdrew from the bidding war. I think the problem is that the listing agent was telling everyone that it was worth $625k all fixed up, but my analysis has future sale price at only about $590k and I did not want to make a mistake getting sucked up into the hype.</p>

<p>House #3 - In the last round I made an offer on a house where the Sellers were very unrealistic about the value. They took the property off market because their ‘cousin’ was going to come down from Northern California and do renovations and they were going to put it back on the market. Well, six months later the yard is cleared out and there’s some new paint on the interior walls and the disgusting carpet is torn out of the house. Nothing else, no kitchen or bathroom renovations. Listing agent walked me through the house and I made a higher offer based on their work completed. I’m waiting to hear back on that one. I might get lucky because it is not listed and I don’t have competition.</p>

<p>Have been going through the foreclosure auctions with a fine tooth comb and foreclosures are definitely slowing down. There’s really only about 5 properties coming up a day (compared to 300-400/day) and the banks are setting their opening bids very high and taking the properties back. But the funny thing is I don’t see any REO (bank owned) properties for sale right now. Where are they all going? Into a black hole at the bank???</p>

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<p>Small world, coralbrook. I might have lived in one of those townhouses back in the 70s. They used them for student housing when they ran out of dorm space. (They weren’t owned by the university.)</p>

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<p>You’re about 1.7 miles from where my sister lives. Her walking route is frequently to UCSD and back home. </p>

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<p>Can you guys see the Flickr group this time?</p>

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<p>I have a followup on the property that I tried to buy in the last round. This is the one where the Listing Agent gave the property to another investor, even though my offer was higher.</p>

<p>It has finally come back out on the market. Amazingly, the prior listing agent is now the selling agent. What a coincidence! This means that the other investor made a promise to the agent that he would give him the future sale if he got the property. Very unethical.</p>

<p>Anyways, it is listed at $799k which is way too high. My estimate when I was doing my offer was about $675-690k. It has been lingering on the market for over 30 days with no action. They are going to have to sit on that property forever or keep reducing price. They did a decent job with the remodel.</p>

<p>You can find it on Realtor.com or Trulia or something. It’s on Shadow Hill in zip 91941</p>

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<p>This townhouse is in La Jolla Southpointe community, way at the end of Via Mallorca, with patio backing to canyon over Gilman. </p>

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<p>I can see the pictures, coralbrook. I’m looking forward to seeing it evolve:)</p>

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<p>Coralbrook - this is close to the area I live in near UCSD! I have several friends that live in Southpointe. </p>

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<p>I can see the pictures. Have you started demo or are those shots of another project? </p>

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<p>On Trulia the Shadow Hill house is listed higher than that. (I really, really do not like that house.)</p>

<p>The town house should be in interesting project. I agree that it would be better to open up that horribly cramped kitchen. And all that carpeting: yuck. Everything in the place reeks of cheap. Actually, I thought the red tile looked like the best thing there, but not next to white carpeting! :)</p>

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<p>The carpeting in the townhouse was disgusting. The kitchen is ridiculously small and poorly designed. We are already done with demo in 3 days. Because this community was designed with no parking anywhere we all have to park about a block away. We can’t have a dumpster so we are making two trips a day to local dump in my truck. </p>

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<p>Thanks for posting this, coralbrook. It is fascinating. And good luck with everything!</p>

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<p>For those that are looking at the Flickr pictures, read the detailed description. This house was built very low quality, especially the kitchen and baths. For some reason the original builder didn’t have backs on the kitchen cabinets, so they went in and painted the walls a horrible dark brown to try to match the cabinet interiors. It is hilarioius.</p>

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<p>My offer on House #3 was rejected by the Sellers, which I expected. They are making improvements to the house to try to get a higher sale price, although it is taking them a long time.</p>

<p>As I expected, my efforts have focused on the remodel project and I haven’t looked at another property this week. I need to get back on task this weekend or I might end up out of the renovating/sell business and into some kind of weird remodel business - without all the proper licensing and bonding :(</p>

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<p>Ooh, we had a house like that. The small second living area (10’x12’) had 30"x30" floor to ceiling cabinets in two corners. We pulled them out and discovered the walls behind were painted “horrible dark brown”. This was a hundred years ago before we had heard of Kilz. I’ll bet we used three gallons of cheap paint in those two corners…we were so young…</p>

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Thanks for mentioning this! I missed this on project #1. (I was too late to the party for project #2, and was never able to see the pictures.) I can’t believe how much I must have missed by not reading the descriptions! What an idiot I am!</p>

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<p>Great comments on the pictures – thanks, Coralbrook. You guys move fast!</p>

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<p>Hunting Update</p>

<p>My hunting abilities suck! I went through the entire MLS and I could only find 2 possibilities to inspect this weekend.</p>

<p>House #4 is only 800sf in an excellent location on a canyon where neighboring properties sell for about $750k. Unfortunately I would need to add 1,200sf to this house to get the size to be similar with the neighboring houses. In our building permit area an addition of 500sf is easier to do with less planning headache. As soon as I get near 1,200sf we are talking major headaches and hassle, driving costs and time. I had to pass on this one.</p>

<p>House #5 had interesting pictures but the reality was horrid. The house is on a sloped lot in a very good location in La Mesa. First, it had a very steep downward driveway - I can just imagine heavy rains just flowing down into the property. In the back, on the slope, half of the original rock retaining wall had collapsed. On close inspection I could see that there was septic sewer piping right where the failure occurred and I could see a half showing septic tank in the yard (not good!!). Interior was beyond horrid. One of the rooms was built into the hillside and was just damp and musty. I just saw another mess on my hands and I’m not ready for something this bad right now. PASS!</p>